Earnings Tracker Earnings inch higher, led by slight upward revisions by banking and utility

Earnings Tracker Earnings inch higher, led by slight upward revisions by banking and utility
Business & Markets 2013
Written by Zatil Husna of theedgemalaysia.com
Tuesday, 17 December 2013 14:34

KUALA LUMPUR (Dec 17): The FBM KLCI crept a bit higher for the week ended Dec 15, led by slight upward revision from the banking sector, followed by the utility sector earnings, said MIDF Research.

In a note today, the research house said the slight upward revision in the banking and utility sector was followed by small downward revisions in other sectors such as plantation, telecommunication and oil and gas (O&G) sectors.

MIDF Research said the current financial year FBM KLCI–Banking consensus earnings per share (EPS) increased 0.08 sen to 42.14 sen during the week under review.

This was driven by upward adjustments in the earnings estimates of Maybank, CIMB and RHB Capital, it said.

MIDF Research said that in tandem with the broad market gains, the FBM KLCI–Banking ended higher by 3.37 points, or 0.58%, to close at 581.70.

It said the utility sector inched up two sen to 11.94 sen, adding that the FBM KLCI–Utility ended the week higher by 1.47 point, or 0.96%, to close at 154.70.

“The additional gain was due to a further upward tweak in the current financial year (end–August 2014) earnings of Tenaga Nasional pursuant to the recent announcement of an electricity tariff hike beginning Jan 1 next year,” it said.

However, plantation sector’s EPS declined three sen to 14.97 sen, dragged down by small downward tweaks in earnings of Sime Darby Bhd, IOI Corporation Bhd and Felda Global Ventures Holdings Bhd, it said.

“Nonetheless, despite profit taking activities in the crude palm oil (CPO) futures market during the review week, continued optimism over the mid-term price outlook saw the FBM KLCI–Plantation added 1.21 point, or 0.41%, to close at 293.70.

“Technically, CPO prices remained in a bull market as it kept above a major support of 2,500pmt. MIDF Research reiterates our CPO average price target of RM2,700pmt for 2014 and we remain Positive on the plantation sector,” the research firm said.

Telecommunications ended lower week-on-week (w-o-w) by two sen to 13.40 sen.

Nonetheless, pulled by the broader market advance, FBM KLCI–Telecommunication ended higher by 1.89 points, or 0.63%, to close the review week at 301.32.

During the review week, current financial year FBM KLCI–O&G consensus EPS ended down by -0.02 sen to 10.43 sen.

“But in tandem with the advancing broader market, FBM KLCI–O&G added 2.78 points on-week, or 1.24%, to close at 226.32. Its PER increased slightly to 21.70x.

“The high valuation multiple of FBM KLCI–O&G is reflective of favourable prospects in the oil and gas sector,” the research house said.